Monday, January 23, 2017

Families Spend More To Care For Their Aging Parents Than To Raise Their Kids

It costs families more to care for a frail older adult than to raise a
child for the first 17 years of her life. Yet, while the government
routinely provides a broad range of assistance and free services for
children, it offers only limited benefits for those needing long-term
supports and services—and mostly only for those who are impoverished and
very ill.

The other day, the federal government released a headline grabbing report:
The average out-of-pocket cost of raising a child from birth to age 17
is about $234,000. Among families where an older adult has severe
long-term care needs and uses paid care, out-of-pocket costs average
$140,000, according to research
by my Urban Institute colleague Melissa Favreault. That enormous cost
is generally spread over much less time, typically four years in
contrast to 17.

But those estimates include only some of the total out-of-pocket
expenses families face when a loved one has long-term care needs. They
exclude costs of care during the time when a parent or spouse needs
lower levels of paid assistance. They do not include costs incurred by
their adult children. And, in contrast to the government's estimates of
child rearing expenses, they exclude out-of-pocket spending for medical
care.

However, health care expenses are a major strain on the budgets of older adults. The average total out-of-pocket cost for health care after
age 65 is at least another $100,000. Those with chronic illnesses that
lead to many long-term care needs pay far more than that.

What We Do For Kids

Yet, think about what the government does for families with kids.
There is, of course, 12 years of free public school. And in many
communities, there is access to charter schools or vouchers for private
or religious schools.

For low- and middle-income households, there are tax credits such as
the Earned Income Credit (EITC) and the Child Tax Credit (CTC). Families
with one child can receive up to $3,400 annually from the EITC,
and families with more kids can get up to nearly $6,300. They may
receive another $1,000 per child from the CTC. Combined, these credits
cost the government $26 billion annually.

There are additional credits
for adoption, foster care, and child care.

When it comes to health care, there is Medicaid, which provides
medical care for low-income families, including kids; and the $25
billion State Children’s Health Insurance Program (CHIP) that covers
children from families whose incomes are a bit too high to qualify for
Medicaid. In addition, private insurance acquired through employers
(including family insurance) is heavily subsidized through the tax code.
Last year, this subsidy was worth $145 billion.

What about long-term care for older adults and younger people with
disabilities? Well, there is Medicaid, if you are poor enough and need a
high enough level of care. Nearly all seniors are eligible for
Medicare, of course. But despite a widespread misconception, Medicare
covers only medical treatment, not personal supports and other long-term
care.

Support for Aging Parents

You can deduct some long-term care costs from your federal income
tax, but only if you’re total medical expenses exceed 10 percent of your
income. And if you are poor (and if you are disabled you probably are),
a tax deduction isn’t worth very much. For low- and middle-income
families, it is much less generous than the tax credits available for
families with kids.

There also are programs funded through the Older Americans Act, such
as Meals on Wheels or information services, but spending for most of
them has been frozen for years. Then there is…well, nothing.

If you require long-term care, you are pretty much on your own. Most
families just take care of their loved ones on their own, without any
paid assistance. Of the $266,000 in average costs for those families
who use paid care, $140,000, or 55 percent, is paid out of pocket.
Medicaid picks up about one-third on average, or about $90,000. But
remember, only about 18 percent of Americans age 65 or older will ever
qualify for Medicaid long-term care benefits.

A society has an obligation to be sure its kids are well cared-for.
But it has the same responsibility for its frail elderly and disabled.
The US is doing its share for its children. It is not doing so for its
aging parents.

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NASGA (National Association to STOP Guardian Abuse, Inc.) is a 501(c)(3) public-interest, civil rights organization formed by victims of unlawful and abusive guardianships and conservatorships. We seek legislative reform of existing law and upgrading of criminal penalties for court-appointed fiduciaries misusing protective proceedings for unjust enrichment and engaging in elder and family abuse.

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